Briscoe boss to be in con­trol af­ter Kathmandu deal

Townsville Bulletin - - NEWS -

ROD Duke will re­tain con­trol of the Briscoe Group if its scrip and cash takeover of Kathmandu Hold­ings suc­ceeds.

Briscoe is of­fer­ing 89.7 mil­lion of its own shares and $ 32.3 mil­lion cash for the 80.1 per cent of the em­bat­tled out­door equip­ment and cloth­ing chain it doesn’t al­ready own.

The of­fer amounts to $ 1.80 per Kathmandu share, based on $ 2.88 per Briscoe share, the home­ware and sport­ing goods re­tailer ments.

It also amounts to a 2015 price earn­ings mul­ti­ple of 15.5 times and an en­ter­prise value to earn­ings be­fore in­ter­est and tax mul­ti­ple of 11 times, based on con­sen­sus es­ti­mates for Kathmandu’s earn­ings, it said.

The en­ter­prise value of the of­fer is $ 418.2m. The deal would cre­ate an Aus­tralasian re­tailer with an­nual sales of




of­fer docu- about $ 913m and a mar­ket value $ 847m, ac­cord­ing to a pre­sen­ta­tion.

Briscoe chief ex­ec­u­tive Mr Duke’s hold­ing of the en­larged group will shrink to 55.1 per cent from about 80 per cent of Briscoe, en­sur­ing he re­tains con­trol. The com­bined group would have net debt of $ 96.8m, com­pared to Briscoe’s debt- free bal­ance sheet and net cash of $ 89.7m in Jan­uary.

Briscoe stock slipped 1.7 per cent to

of $ 2.85 af­ter takeover doc­u­ments were re­leased on Wed­nes­day, while Kathmandu dropped 2.9 per cent to $ 1.70.

There had been spec­u­la­tion Mr Duke would have to make a higher of­fer for Kathmandu, whose shares traded above $ 4 last year. Kathmandu traded at $ 1.39 be­fore Mr Duke on Tues­day dis­closed he had built a 19.9 per cent stake in the tar­get com­pany and in­tended to make a full takeover.

CHANGE ON HORI­ZON: If the Briscoe Group gains con­trol of Kathmandu Hold­ings, there will be more than 100 stores across Aus­tralia and New Zealand.

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